Titan Ltd is a manufacturer of electrical production. It was set up in Shanghai 10 years ago and is a value added tax (VAT) general taxpayer. In 2019 October, Titan Ltd had following transactions:

(1) The cost of the table-lamp is RMB80 each. Titan Ltd throw away 100 inventory of table lamp at the end of October. Because the wire of table lamps had been bitten by mice due to poor management of the warehouse. The information of remaining table lamps are as following: 500 table-lamp were sold to the supermarket at selling price RMB 120 each. The selling price was exclusive the value added tax (VAT). 200 table-lamp were sold to the employees at a discount price RMB 90 each. No invoice was issued.

(2) Titan Ltd purchased raw material for RMB 120,000 (excluding value added tax) and VAT special invoice was obtained. Titan Ltd used 65% of raw material to the production. And kept remaining raw material in the warehouse.

(3) Titan Ltd paid a transportation fee of RMB20,000, excluding VAT of RMB2,200, as shown on the VAT special invoice.

(4) Titan Ltd paid RMB75,000 rent and RMB3,750 VAT to the owner of warehouse. The VAT ordinary invoice issued by the warehouse owner.

(5) Sold old equipment and received RMB6,000. No invoice was issued. The old equipment was acquired in November 2016 for RMB48,000, with input VAT of RMB8,160 credited in the month of purchase.

(6) The retail selling price of TV was RMB4,000 for each. In order to increase the market share, Titan Ltd offered a promotion coupon to the customer. Customers who received a coupon, could reduce the price of RMB200 for each TV. That means the customers could purchase TV at RMB 3,800 with coupon. The coupon cannot be exchanged for cash. In October 2019, Titan Ltd sold 4,000 TV purchase with coupon. The TV retail price is including the value add tax.

Note: You should assume the above are the only transactions with VAT implications.

Required: (1) Using the relative information provided on items (1) to (6) above to calculate the input value added tax (VAT) credit. (6 points)

(2) Using the relative information provided on items (1) to (6) above to calculate output VAT. (4 points)

Value added tax (VAT)

For importation of goods	For itemized goods (except for agricultural products) 13% For agricultural products 9%
For small-scale taxpayers and simplified method For general taxpayers	3% For the sale of itemized goods, provision of processing, and repairing services 13% For the sale of agricultural products 9% For transportation service, postal service, telecommunication services 9%. For sale of services, intangible assets is 6%
For primary producers of agricultural products	exempt

VAT pilot programmed

Rate

For small-scale taxpayers of real estate and immovable property

leasing services, grandfathered old projects taxed by the simplified

method and certain special industries taxed by the simplified method 5%

Small-scale taxpayers and certain industries taxed by the simplified

method except for real estate and immovable property leasing services 3%

R&D and technical services, IT services, cultural and innovation services,

logistics auxiliary services, attestation and consulting services, and

broadcasting, film and television and certain telecom services, financial

services, consumer services 6%